Tax shift

An income tax plan that puts a greater burden on low-income Kansans needs some more work.

Gov. Sam Brownback has set a bold agenda for the current legislative session including a major overhaul of the state’s income tax system.

While the plan he has put on the table may have some merit, the disproportionate burden it places on low-income Kansans is raising questions that demand the close attention of state legislators.

The governor’s plan is good news for most higher-income taxpayers and especially for small business owners, but it holds considerable bad news for Kansans at the low end of the income spectrum. Figures compiled by the Kansas Department of Revenue estimate that the amount of income tax paid by Kansas residents overall would decrease by about 12 percent under Brownback’s plan. However, the way that saving is distributed is cause for concern.

The Revenue Department figures show that the 564,328 Kansas tax filers with adjusted gross incomes of $25,000 or less received a total refund of $1.7 million in the 2009 tax year. Under the Brownback plan, that same group would owe a total of $86.5 million, an average of $156 per filer. At the same time, the 21,158 Kansans with adjusted gross incomes of $250,000 or more would pay an average of $5,239 per person less under the Brownback plan.

The governor’s plan also eliminates a number of tax deductions that would have a significant impact on low-income taxpayers. Key among those is getting rid of the Earned Income Tax Credit, which benefits about 255,000 Kansans, generally low-income workers, by helping them keep more of what they earn. The plan does away with deductions for mortgage interest and child care expenses, which will have a significant impact on Kansas families with low or moderate incomes. The governor also is proposing that the state sales tax, which was scheduled to drop to 5.7 percent in 2013, be maintained at its current 6.3 percent. Sales tax is a particularly regressive tax, especially when it is applied to the sale of groceries, as it is in Kansas.

Also eliminated in the governor’s plan is the income tax deduction for charitable contributions, which likely would suppress donations to the very nonprofit organizations that could provide a helping hand to low-income Kansans. However, Revenue Secretary Nick Jordan and economist Arthur Laffer, who acted as a consultant on the Brownback tax plan, told legislators last week that money saved by eliminating tax deductions would be plowed back into social service programs to help needy families.

Making low-income people pay more taxes so that more money is available to fund programs for needy Kansans is a questionable strategy. Traditional conservatives would say that people know better than the government how to spend their money and could do so without adding the administrative costs of a government program to redistribute the funds to the “needy.” Is that the best justification the Brownback administration can offer for a plan that places additional tax burdens on low-income Kansans?

Laffer, who is considered the father of supply-side economics, maintains that the tax plan will pay off in the long run for low-income Kansans because it will lure more business to the state and create jobs. That certainly is a desirable goal, but Laffer’s economic theory is controversial and, some economists say, unsound.

Given today’s economic climate, the governor and state legislators face a serious challenge in how to update and improve the state’s income tax laws for the benefit of all Kansans and the state. It’s not an easy task, but most states are facing a similar challenge. Kansas lawmakers must give their best effort to devising a state tax plan that is fair and balanced for Kansas taxpayers. It’s time for a genuine nonpartisan study of the state’s income tax laws, not finger-pointing and political posturing.

Comments

To paraphrase Travis Bickle: "All the animals are growing in their numbers - the poor, the disabled, the elderly, women, children, sick, venal. Someday a real rain will come and wash all this scum off the streets of our fair towns here in Kansas....."

Legislative tax committee members may have conflicts of interest on tax plan

TOPEKA — Members of the state Legislature’s tax committees aren’t just key decision makers on Gov. Sam Brownback’s tax plan — they’d also be among its biggest beneficiaries.

Twenty of the 23 members of the House Taxation Committee have business interests that would be exempted from state income tax under the Brownback plan. In the Senate, nine of 11 members of the Assessment and Taxation Committee have interests that would go untaxed.

The data is reported in the lawmakers’ statements of substantial interest, a form all state officials are required to file disclosing business interests that could affect their governmental duties.

After looking at the data gathered by The Eagle, Senate Minority Leader and tax committee member Anthony Hensley, D-Topeka, suggested that some of the members should consider recusing themselves from voting on the plan.

“They certainly ought to at least let the general public and the rest of their colleagues know that they have a conflict of interest,” Hensley said. “We have rules in the Senate that provide for that.
“When a bill hits the floor on final action, you cannot be forced to vote if you have a conflict of interest and you announce that publicly before the vote takes place. It addresses this very kind of thing.”

Equal? Except you and you are extraordinary - right? You seem to operate in a separate reality when it comes to relating to real numbers and facts. Between you and it's_just_math there is not a functioning abacus to be found. You just repeat the constant GOP/Tea Party bundled mis-information stream.

As repeated from above, here are factual numbers FHNC. Loving to hate Obama is getting you no where but down and dirty.
Debt increase by presidents: Reagan 186%, Bush 54% Clinton 41% Bush II 72% Obama 23%. Source CBO.

Everyone should have to pay taxes, then they would appreciate things more.

If someone or someplace paid your electric bill in the summer, you would not care how much you ran your air conditioner. Same with taxes, if you pay nothing, then you generally dont care how much you take from the system.

We have a whole generation of those who put less into the system than they take, and we wonder why there is no money.

Some don't pay income taxes, and those people fall into two categories. One is the very rich who can afford to hire lobbyists to get tax legislation with loopholes that only they have access to.

The other category is those who are very poor. Do you really think that when the food runs out at before the end of the month that they are dancing around with glee at how they've been able to avoid paying income taxes?

But folks like you really would rather see these people suffer even more than they already do just so things fit your perverted view of "fairness."

If the two categories are the very rich and the very poor, yet the number add up to nearly 50% the don't pay income taxes, you're going to have included in that number a wide variety of types of people.
In the rich category we might fine people who have worked very hard, come from humble beginnings yet through their work have made themselves very successful. We might find people who have inherited great wealth and contributed little to the betterment of the society in which they happened to be born. We might find shiftless people who hire shiftless lawyers and shiftless accountants who find every possible loophole in the tax laws.
But if their numbers are anything like the 1% that is so often thrown around, and we know the total is near 50%, that means the poor that you speak of, those so desperate that contributing to society would force them to chooses tax or food, that's 49% of the population. There is no way 49% of the population is teetering on the brink of starvation.
In that 49% that don't pay income taxes will be honest working poor. It will be people born into poverty who have been unable through their honest labor to pull themselves out of the circumstances into which they were born. But it will also include shiftless people. It will include the lazy poor. It will include the poor who lack any desire to change their lifestyle. And it will include the poor who have made so many poor decisions in their lives that continued poverty becomes an inevitably.

So what's your point? Should we tax the hard working poor for money they don't have to spare just so we can make sure we can punish the relatively small number of the "lazy and shiftless" you seem to be so fixated on?

My point is that you've expanded the definition of poor so wide that it includes the poor and the not so poor. It includes much of the middle class. It includes people who work and people who choose not to work. It includes people who play by the rules of society as well as people who do not. It includes people who have made a poor choice in their lives as well as people who have made poor choices a daily habit.
If you believe that the number is so small and I'm fixated on them, yet you constantly complain about that very small number at the top, the .01% of which you so frequently speak, then who is really fixated on a small number. Do you really believe that only .01% of the poor are victims of circumstance and the other 49% are teetering on starvation even though they play by the rules and still pay no income tax?
My point is that your comment painted with too wide a brush. Anyone with eyes will see that amongst the poor and wealthy alike will be people who have made both good and bad choices. Painting one as good and the other as evil is to tell a story that has more lies than truth.

"If you believe that the number is so small and I'm fixated on them, yet you constantly complain about that very small number at the top, the .01% of which you so frequently speak, then who is really fixated on a small number."

Do you really see no difference between the wealthiest .01%, who want for nothing and exert tremendous control over everything government does, and the relatively small number of poor schmucks who barely scrape by (even if they do manage to occasionally get some food stamps) and exert absolutely no influence on anyone in government?

I don't care too much that they exert little influence on government. Neither do I and I've spent a lifetime working hard and playing by the rules.
But having worked in social services in years past, I saw huge numbers of people who were poor because they made bad choices for themselves. And they did it repeatedly despite being given good advice not to. And they did it despite being given the opportunity to make other choices.
What I would caution you against is lumping that group with the real group of good, honest decent working poor. These are people who for whatever reason, have been unable to pull themselves out of a daily subsistence standard. Yet it is still exaggeration to suggest that the are on the brink of starvation. There are multiple programs everywhere in this country to avoid that.
My point is for you to lump those two groups together, the working poor and the deservedly poor, does a disservice to the former. And yes, from my years working in social services, the larger group is the one that makes poverty a lifestyle choice.

"Yet it is still exaggeration to suggest that the are on the brink of starvation. There are multiple programs everywhere in this country to avoid that."

But you seem to think that subjecting them to starvation is somehow justified, and would result in a better society.

And if you had to actually walk and live in these people's shoes, rather than just sit in judgement of them, I expect that the choices you claim they have are not as readily available to them as you think. This is largely a winner-take-all society and economy, which means that lots of people have to be the losers.

Beat people down long enough and often enough, and they rightly begin to think that there is no alternative for them. And there is no shortage of effort in reinforcing that view of themselves.

"But you seem to think that subjecting them to starvation is justified..." I repeat, starvation does not happen here. Not with all the programs to prevent it. I can't subject them to something that doesn't exist. You said they would have to choose to do without food. I'm saying that's a false claim, made to enflame passion. But it lacks truth.
As to walking in their shoes, I came from very humble beginnings and with a lifetime of hard work, I've pulled myself firmly into the middle class. As the child of immigrants, it's a common enough story. I hope the next generation improves on that. But having said that, there are well known pitfalls that will likely prevent climbing the socioeconomic ladder. Yet these pitfalls are fallen into all too often. Smoking, drinking, drugs, gambling, all well known. Dropping out of school. Poor diet. No exercise. All well known.
As I said, when I worked in social services, I cautioned people all the time. These were not abstract, nameless case studies. These were real people with real faces. I looked them in the eye and said, "do this and bad things will happen, do that and good things will happen". I said those words more times than I'd care to remember. They made bad choices far more often than good choices. That's not passing judgement. That's just telling what I saw.
Then they come back, and again and again. Hence my trampoline analogy.

Let's say that you are right (and I will say that I have seen the same thing and you and Bozo are probably arguing about degrees rather than substance).

We can argue about fair taxation, but that's not the basic problem here. Poverty is the real problem. What is to be done about it? That is the real and hard question. When parents are not making good decisions, there's a good chance the children will model their behavior and live a life of bad decisions. When people have no confidence, whether because of lack of self-confidence or because of hopelessness, that they can change their lives, likely they will put less effort into it. I would say that we need to put more effort into education about how to live, starting with pre-school and work towards a society where everyone does have a fair chance.

The other thing is that if I make a bad decision (and we all do at some point), I most likely can recover from it. If a single mother with a low paying job makes a bad decision and loses her daycare, she may lose her job, then her apartment and car---and the cycle just goes on.

We all know that decreasing taxes will decrease the amount of money spent on programs to help the poor, both working and otherwise. In my opinion, we need to look at how that money is being spent and whether it results in positive or negative results. Obviously there are people who will never be able to support themselves financially because of handicaps, but those who are capable should be doing so and would probably feel much better if they had a bigger stake in their lives. However, we have to have a way of making that happen and one is the availability of jobs that one can survive on.

Frankly, my one vote won't make a difference either way. I can vote Democrat, Republican, third party or not vote at all and it will make no difference.
I wish it were not so, but it is. There are literally millions of voters who will vote having done little to inform themselves of the issues. As long as that is permitted, my vote means nothing.
There are individuals who can spend untold millions to influence those that can be influenced by sound-bites. As long as that is permitted, my vote means nothing.
As long as organizations that can muster their members to vote in their own self interest while ignoring the consequences on the greater good of society (whatever that is), then my vote means nothing.
In short, we have a system that discourages people from becoming informed while rewarding those that choose ignorance.

And, if enough people think as you do, and act accordingly, it's a self-fulfilling prophecy. Whereas, if they act as if their actions make a difference, the results will be different.

For example, independents have a serious effect on elections - if they vote third party as a group, that affects them in certain ways. If they choose one of the two main candidates, that affects them in other ways.

I agree that many are uninformed and don't think critically about issues, which is a real shame - it's one of the reasons I support public education, and would like to see it improved.

The reason that some can spend untold millions on political advertising has to do with a recent SC decision, one which almost certainly would have gone the other way if the conservative/liberal balance of the court were changed by one - ie. 5/4 liberal instead of the other way around. Since presidents appoint SC justices, a more liberal president would have appointed a more liberal justice, and then...

Bush stacked the court with conservatives - if he had been defeated in a general election, he wouldn't have been able to do that.

A lot of people don't think about that aspect of presidents, but it's a very important one, given that SC justices serve for a very long time, until they retire voluntarily or die.

Let's be clear about a couple of things. When discussing my one vote, I spoke in certain ways. You've now expanded that to "they", when you discussed independents. Now you're agreeing with my premise that blocks of voters can have influence while my one vote does not. I've advocated voting for third parties because if a block did that, the two major parties would listen, if there was a block of votes. You've been somewhat dismissive of that position in the past. (or I am not interpreting correctly). Now you seem to be saying they do have influence. Which is it?
Basically, what I was saying in the previous comment was that it scares me more that we have millions of Americans voting who are uninformed at a most basic level, and that that is a greater problem than many of the other problems we have. And while I also am a big supporter in education, the fact is than the reason most Americans are so ill informed is not lack of education, or lack of available information. It's apathy. They just don't care.
I've mentioned before, that one of the side effects of placing higher taxes on everyone, my flat tax proposals, is that once you start taking their money, in the form of taxes, they become interested. Taxing the poor will give them the incentive to vote more and will then give them greater voice in government. It's a way of increasing the size of that voting block.

Remember a while back I mentioned an election for governor here. Vern Miller vs. Bennett. I voted for Bennett because I disliked Miller more. Bennett then proceeded to everything he said he would even though I disapproved of much of what he did. But how could I complain?
Obama vs. Bush sounds like a clear choice. Is it? What about the times when your choice is between Bush and Bush? Too often the choice between Democrat and Republican resembles Smith vs. Jones.
But recall the early years of the Viet Nam War. Neither party was particularly anti-war. Protests followed, third party runs by McCarthy, blocks of voters becoming disenfranchised and suddenly both parties were anti-war, with the difference being how to achieve that disengagement.

If people are uninformed, do we want them voting? Well, if literacy tests were bad and education doesn't produce an informed and willing group of voters, maybe taking their money will get them interested.

The problem might come down to this; I agree with 10% of what candidate "D" says while disagreeing with 90%. And I might agree with 5% of what candidate "R" says while disagreeing with 95%. You would advocate I vote for candidate "D" while I might seek a third party alternative. But now you're saying that if I did hold my nose and vote for candidate "D", then I shouldn't have anything to complain about. That's exactly what happened in the Miller vs. Bennett scenario I mentioned above.
Of course, I'm not so out on the fringe that things are typically 5% of 10%. Usually, it's 51-49, one way or the other. Maybe I should make my voting decisions more in line with the majority of Americans, flip a coin.

You should be clear that the figures you bandy about apply only to Federal Income Tax. And that the 49% you use (actually it is 47% according to the study that was done) applies to households, not total population.

I probably have less a problem with low income families owing another $156 than I do with giving such large tax cuts to wealthy people.

It is unnecessary to do this and it will put a larger burden on our ability to take care of our needs.

Why do the Republicans insist on doing this? Well, it is politics and aren't we sick of Kansas politics?

Only the voters can make the politicians honest and as long as the voters refuse to question their leaders, their favorite talk show hosts and political columnists this insanity will continue and we will continue to see political parties dominated by unqualified candidates.

"However, Revenue Secretary Nick Jordan and economist Arthur Laffer, who acted as a consultant on the Brownback tax plan, told legislators last week that money saved by eliminating tax deductions would be plowed back into social service programs to help needy families."

Another hard hitting editorial by the LJW. How about the fact that Brownback feels he has to go out of state for expert advice on Kansas issues? And then spends $75,000 of our money on a guy who's theories have been long discredited and also happens to be in trouble for a ponzie scheme in Texas???? It's just like Seidlecki. Brownback has faith but not in Kansans.

It's those on the right that claim people "pay no taxes" when they should really be saying pay no "federal" income tax - and your comment should specify that as well.

Interestingly, the people who did the research that came up with that figure have said publicly and clearly that many on the right are misinterpreting and misrepresenting it - they never concluded those folks are "freeloaders" or should be paying federal income tax.

Liked the editorial. I was interested to see Laffer's name come up. When we studied him in college, he was advising Reagen. The book was still open on his brand of supply-side economics which is often termed as Reagenomics.

Like a trade in baseball, you usually don't know if it was a good one or not. The book on the Laffer curve is at best neutral (ie the negatives and positives equal), but is mostly considered bad economics. This is mostly due to the fact that trickle down theory works in a model, but not necessarily in real-life as the extra money investors had would go back into paper investments rather than a "physical" or tangible business with property, plant, and equipment, and of course employees. In addition, recessions are almost always a result of a demand problem.....not supply. This is what we experienced in the 30's and what we are experiencing now. Supply is not the problem.